Background and Relevance
Querétaro, Mexico, is home to a thriving plastic industry that has been navigating the challenges posed by U.S. tariff policies and the potential risk of a U.S. economic recession. The industry’s primary goal is to avoid decline and maintain its competitive edge as supply chains realign.
Arturo Nava Guerrero, the president of the Querétaro Plastics Cluster, emphasized that the industry has not set growth projections for 2025 due to the focus on preventing a decrease in production. Nava highlighted that the first half of 2023 might bring continued uncertainty regarding U.S. tariff policies.
Export Dependence and Tariff Impact
The manufacturing sector, including the plastics industry in Querétaro, sees nearly 50% of its production destined for direct or indirect export. Of this, approximately 90% is shipped to the United States, reflecting the close relationship between these two markets. The remaining 10% goes to countries in South America, Europe, and Canada.
Nava noted that few companies in the sector have free trade agreements, which would require them to absorb potential tariff costs. Instead, he estimated that nearly 99% of operations are under contracts exempting them from paying these tariffs.
Challenges and Strategies
The main challenge lies in mitigating the tariff increase that will affect local companies’ clients. Some clients have requested cost or price reductions to remain competitive in the U.S. market, which faces the risk of recession and potential consequences for the Mexican industry.
Nava explained that as suppliers in the supply chain, local companies must maintain their competitiveness amidst market price fluctuations. The industry focuses on increasing efficiency, productivity, and reducing costs to stay ahead.
Export Growth
In 2024, the plastic and rubber industry contributed 6.7% to Querétaro’s total export value, making it the fifth-largest subsector in external sales, according to Mexico’s National Institute of Statistics and Geography (Inegi).
The value of plastic and rubber exports reached $1,174.5 million in 2024, growing by 8.3% annually. This growth contrasts with the 3.2% decline in Querétaro’s total export value that year.
Key Questions and Answers
- What are the main goals of Querétaro’s plastic industry? The primary goal is to avoid a decline in production and maintain competitiveness amidst realigning supply chains.
- How do tariff policies impact the industry? Tariff uncertainties can lead to increased costs for local companies, which may need to absorb these expenses or pass them on to clients.
- What strategies is the industry employing to stay competitive? The industry focuses on boosting productivity, reducing costs, and maintaining efficiency to remain competitive.
- What is the significance of exports for the plastic industry in Querétaro? Nearly 50% of the industry’s production is destined for export, with 90% going to the United States, highlighting the strong connection between these markets.
- How has the plastic and rubber industry performed in recent years? The sector contributed 6.7% to Querétaro’s total export value in 2024, growing by 8.3% annually, while total exports declined by 3.2%.
